Can Your Investments Survive the US-Iran Crisis?

**Tim Elliott** (0:00)
It's the Morning Drive, fresh tensions between the US and Iran are rattling global markets once again, raising fresh questions about inflation, about interest rates. And where investors should put their money next as geopolitical risks return to the spotlight, what should investors expect in the weeks ahead? Lots of questions to ask Ryan Lemand, who is the founder and CEO of Neovision Wealth Management, joining us with insights on navigating today's uncertain market landscape. Ryan, welcome back. Good to have you with us again.

**Ryan Lemand** (0:36)
Good morning, Tim. Thanks for having me. It's a pleasure to be again.

**Tim Elliott** (0:39)
It's a pleasure to have you. Welcome back. So we've seen Brent Crude experience immense volatility. The global supply chain is absorbing some pretty big shocks from this conflict. From a wealth management perspective, now that we're nearly just over four months in, can I ask you a similar question to one that I asked you some months back?
Is this a temporary knee-jerk market reaction, or are we looking at a fundamental regime shift in terms of the market volatility we're experiencing?

**Ryan Lemand** (1:17)
Well, there are multiple facets to the story. The first one is the energy shock has taken place. That's it. And in our opinion, this will translate into a spike in inflation, which we are starting to see. And the Fed is starting to react to it. We've heard Waller on the Fed board who mentioned an interest rate hike. I think any reduction in interest rates by the Fed is off the table completely.
And now we're talking about increasing rates by the Fed. So the energy shock has taken place. Now we're living the aftermath. Now, regarding oil prices, that's a very interesting point. We've seen the detente that happened, the discussions of the MOU between Iran and the US. And oil prices dropped. So everyone thought, this is it. It's over. However, what dropped is simply the screen oil price, the paper price of oil. This is not the actual price of oil that you have to pay to get an oil barrel delivered to your home or to your industry.
This is just simply the screen price of oil.
And the proof to that is if you look at gas prices in Europe, US and multiple other countries, they remain quite elevated as if oil was trading at between 90 to 100 dollars. So we shouldn't be fooled by the price of oil that we see on screens because it's not the actual price of oil for the consumers. Consumers do not buy paper oil or screen price oil. They actually buy gasoline for their cars. And that price remains very elevated. And this translates into the inflation spike that we are expecting.

**Tim Elliott** (2:58)
So, I mean, oil prices react really very sharply, of course. I mean, this morning, this morning in Asian trade, Brent crude's up just under 1 percent. It's about 83, 87 Or it was when I looked a little while ago, US traded oil was a little bit higher than that at 70, just over 79 dollars a barrel.
That's after more than 9 percent jump in the price of Brent on Monday, as the conflict seemed to be escalating. So, the natural next question to ask you is, how long could this volatility last? I feel like I've been asking that for the last four months. I might as well ask you how long a piece of string is, right?

**Ryan Lemand** (3:38)
Well, when this whole war started on the 28th of February, we all thought this is going to last a week or two, just like June of last year. And some sort of an agreement will be reached. It's just negotiating with a few missiles. However, now, four months down the road, and war clearly having started again, with President Trump talking about even tactical nuclear bombs used in Iran. The missiles that we've seen being exchanged between Saudi Arabia and Houthis in Yemen. So clearly, war is starting again. We've also seen Trump writing to the Congress informing Congress that war has started with Iran, which gives him a 60-day window for another military engagement with Iran. So this is no longer geopolitical tension. We're back to missiles. President Trump announced also last night that some bombings will happen in Iran today.
So, yes, I think war has started again.
How long would this last? Again, we thought it's going to last two weeks. We're four months down the road. I wouldn't be surprised if this lasts until the end of the year.
So volatility is expected all across the board. Oil, stocks and inflation spike. Unfortunately, wars are inflationary.

**Tim Elliott** (5:00)